Boeing Could Boost Dividend by 9.1% in December – Bloomberg

By Michael Aneiro

For all you dividend junkies, Bloomberg is out with a story today saying Boeing Co.’s (BA) quarterly payout could rise by as much as 9.1% to 48 cents a share next month as the company eyes returning cash to investors amid efforts to bolster a stock price hurt by delays to its 787 Dreamliner jets.

The report comes as many companies are considering boosting dividends by year-end ahead of a possible rise in dividend tax rates beginning in 2013.

Bloomberg cites its own data for arriving at the 9.1% figure, which would be the largest increase for Boeing since a 14% hike in December 2007 and comes after a 4.8% dividend boost in 2011 and no increase in 2010. Quoth Bloomberg’s Susanna Ray:

Boeing has $11 billion in cash and the promise of more to come, as it boosts output to get planes from a record $307 billion order backlog to their buyers, who typically pay 40 percent of the price on delivery. Chief Financial Officer Gregory Smith said Nov. 13 that buybacks are “a big priority” and that Boeing is studying its dividend.

“Boeing doesn’t get much benefit of the doubt from investors after all the program delays and issues,” said David Rowlett, a Baltimore-based analyst for T. Rowe Price Group Inc., which owns about 30 million Boeing shares.

Boeing fell 3.5 percent this year to $70.77 on Nov. 16, compared with gains of 4.2 percent for Airbus SAS parent European Aeronautic, Defence & Space Co. (EAD) and 8.1 percent for the Standard & Poor’s 500 Index. The shares have dropped 30 percent since Oct. 9, 2007, the day before the first 787 delay became known. That trails EADS and the S&P 500 over the same period.

“Boeing should be deploying more cash to shareholders, particularly since the share price is depressed,” Douglas S. Harned, an analyst with Sanford C. Bernstein & Co. in New York, said in a Nov. 6 note. “We would like to see plans for cash to shareholders above a minimum level of $2 billion for 2013.”

Boeing shares were recently up $1.13. or 1.6%, late Monday morning to $71.90.